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Quite right Andy. Mobile payments will finally take off when more effort goes into figuring out what the business problem is it's solving, and how it does so in a way that is sufficiently valuable, useful and simple to adopt that people actually do, than
goes into predicting the massive scale of the opportunity. Some further clues
Andy, as I see it there are a couple of significant issues the industry needs to face. First and one of the biggest potholes that I can think of for mobile payments is the lack of a mobile signal. Based in the SE of England it's only too easy to think
that everywhere has a mobile signal. Some of us don't have that luxury. And if a payment system is not ubiquitous then you will have a problem getting it adopted and accepted by the customers. That's a showstopper.
On the issue of mobile coverage, are the payments providers in a position to bully the mobile telecoms providers in to truly getting 'universal' coverage? I think not. But rural markets are marginalised all the time anyway, so why should this be any different?
And the big question you ask is why should we adopt mobile anyway? What is in it for me as a cardholder or the merchant? Is it cheaper? Is it more secure? The technology is interesting - to the technology suppliers - but why would I want, or need, to
change my current behaviour if I get no benefits? Today I see no benefit, so why should I adopt a change in behaviour?
Lots of questions and no answers. To me this will cause a continuing reluctance in the widespread adoption of the technology. So you are right. Someone somewhere needs to tell me that I'll save time, money and effort in adopting the technology, if it's
available that is.
Perhaps the issue is, for countries whose underlying communications infrastructure is based on underground copper wires, a pothole leads to disruption.
For societies which have gone directly to mobile, the potholes aren't a problem.
Richard, Neil - you both make good points. In the developing markets that Neil highlights the alternative for most of the population is cash. So the choice is cash or mobile banking/payments and many people are choosing the mobile option.
In countries like the UK where we already have a wide range of payment choices there is a more difficult proposition. The key is thinking about the customer - recognising there is not just one type of customer - but also not assuming that because something
works well in one geography it should automatically apply somewhere else.
Richard, I understand your frustration with the mobile signal. I live in SE England in leafy Bucks but in a small village and have very poor mobile reception at home. No one should assume there is blanket coverage across the UK.
Mobile payments mean many different things to different people. The same can be said about payments itself.
Mobile does offer new options and opportunities but these have to solve real issues and as mentioned previously be adopted by consumers and retailers.
Infrastructure challenges are just one example. This is why mobile payment solutions are very different in developing economies to mature economies. Think of the success had with MPESA in Kenya.
I am a strong believer that consumers should be offered choice in regards to payments and rather than all payments switching to mobile from cash and cards it becomes just another option.
Retail card payments used to be known by the abbreviation EFTPOS which was meant to stand for Electronic Funds Transfer at the Point of Sale but was known to others as Extremely Fancy Technology for a Perfectly Ordinary Sale.
We are starting to see the potential for mobile payments, but there remains a long way to go.
Hi Andy, great write-up but what is the business case for the retailers? I agree that they have the capability to "add value to mobile technology, through loyalty schemes, vouchers, ‘favourites’, preferential checkouts for mobile users" but clearly they
don't have sufficient motivation.
loyalty schemes / vouchers: you're suggesting that the retailer should fund the mobile technolgoy by offering customers extra incentives. I don't see why a retailer would prefer to have their customer pay with a mobile over another means
'favourites' works only if the retailer provides the app (as is the case with Pizza Express) but I can't see this scaling - will consumers really install a new app for each retailer they shop at? Won't they get annoyed that each app is slightly different?
preferential checkouts: that's a good one. But we already have self-checkout, express check-out, and the normal lanes - which one should be duplicated for mobile (surely not all 3)? But if you don't do it for all of them your customer would still have to
make sure he has his cards at all times.
About network coverage: I'd expect that that mobile payments (unless it's NFC) would require the retailer to provide WIFI